By Papisdaff Abdullah
Ghana’s Vice President, has absolved the NPP administration of blame for economic hardship in the country. Dr Mahamudu Bawumia asserts that the COVID-19 pandemic and Russia’s invasion of Ukraine is responsible for the hard times in Ghana.
He maintains, “this is the reality countries and economies throughout the world are experiencing severe challenges following the COVID-19 pandemic and the more recent Russia-Ukraine war. The pandemic which started early in 2020 resulted in the greatest economic depression since the 1930s, with most countries recording negative growth. Supply chain disruptions and the rising price of oil have resulted in the prices of fuel going up across the globe”.
The Vice President was delivering a lecture on the economy at a National Tertiary Students Confederacy (TESCON) Training and Orientation Conference in the Central Region. “The economy is what we feel in our pockets. I acknowledge that we are going through challenging times,” he said.
Dr Bawumia also attributed the depreciation of the cedi on challenges in approving the 2022 budget, Russia-Ukraine war and degrading of the economy by international rating agencies. According to him, the situation brought about among other things low investor confidence in Ghana’s economy. “The financial markets’ assessments of the 2022 budget, unfortunately, concluded that our projected 40% increase in revenue which underpinned the 2022 budget was not likely to materialize and therefore, our deficit will increase,” he revealed.
The Vice President told that gathering that “the chaotic battle in Parliament over the budget and the passage of the budget did not also help matters. This created uncertainty and signal to the market that government may not be able to get most of its programs passed in a tightly balanced Parliament. This further reinforced the lack of confidence by investors in the budget.”
“Furthermore, delays in implementing major tax reforms appeared to support the assessment that the market will have difficulties in passing its programs. To add to these negative market sentiments, there was a sovereign credit rating downgrade by Fitch and Moody’s as a result of concerns about fiscal and debt sustainability.”
“So they wanted to get a hold of the foreign exchange now, and this led to the demand for the US dollar on the market. The increases in interest rates in the US and other economies also made the cedi unattractive. And in February we had the conflict between Russia and Ukraine. Associated fuel price increases also put pressure on the local foreign exchange market.”
The Vice President however reaffirmed the Akufo-Addo government’s commitment to its vision of transforming Ghana despite the global economic challenges which have wrought dire straits on the country’s fortunes. Dr Bawumia said the Akufo-Addo led government has been focused on undertaking major structural reforms in the Ghanaian economy by shifting from a focus on the production of raw materials to value addition, and by diversifying the economic fundamentals.
This, Dr Bawumia said, is to address the urgent need to change the structure of the Ghanaian economy and make it responsive to the realities of the time, especially as the world moves in to the Fourth Industrial Revolution.“ Virtually every government in our history has noted the need for Ghana to change the structure of the economy through diversification and by shifting from the focus on the production of raw materials to value addition. This is a key pillar of Nana Akufo-Addo’s Ghana Beyond Aid agenda,” Dr Bawumia emphasized.
The Vice-President explained that to accomplish this, Government has implemented a number of programs that continue to yield significant results, and has plans to implement even more. Some of the programs include Planting for Food and Jobs to increase agricultural output for agro-processing and food sufficiency, which has resulted in a significant increase in food production.
“Reforms in the cocoa sector (including hand pollination have resulted in the highest ever cocoa production (1,047,385 tonnes) recorded in Ghana during the 2020/2021 cocoa season. This is very remarkable.”
The “One-District-One-Factory” policy has taken off with a significant impact on the manufacturing sector, Dr Bawumia continued. 106 factories have been completed and are operational, and 148 factories are under construction. This represents the largest number of factories established under a government program since independence.
“The facilitation of the growth of an Automotive Industry is on course. Volkswagen, Suzuki, Sino Truck, Peugeot, and Toyota, and recently Nissan have all established assembly plants in Ghana. KIA, Hyundai and Renault are also on course to start production in Ghana this year. Kantanka automobiles is also benefiting from the same incentives that have attracted these giants onto our shores.
True to its commitment to diversifying the economy and value addition, the Government has started the process of building the integrated bauxite and aluminium industry, the Vice President pointed out.
“The partner for the project (Rocksure International), a wholly-owned Ghanaian company, has been selected and has already started work to develop the Nyinahin-Mpassaso hills. The Minerals Resource Estimate to confirm the quantity and quality of the bauxite will be undertaken this year after which the refinery design will follow for the establishment of the aluminum refinery. Ghana has waited for this since independence and with visionary leadership, sound planning and by the Grace of God it is finally happening,” Dr Bawumia indicated.